Reddit favorites triple in a week and AMC shares rise again

Stocks AMC Entertainment Earlier Friday trading rose 25% this week as Reddit traders continued to build on speculative names.

Profit followed a 35% advance in the previous session. Stock prices have already risen by nearly 200% to date, with a huge increase in 2021 reaching 1,500%.

AMC is the most active stock on the New York Stock Exchange on Thursday, with approximately 700 million shares changed. According to FactSet, the average 30-day trading volume is just over 100 million shares.

Edward Moya, Senior Market Analyst at Oanda, said: “Yesterday, AMC500k and AMC Squeeze became a trend on Twitter, and that momentum pushed stocks above the highs of the end of January that we saw at the peak of meme stock enthusiasts.”

Cinema chain Replaced GameStop as the most popular stock At the infamous WallStreetBets Reddit forum, according to an analysis of stock mentions on the Bank of America chat page.

Avid Reddit traders are encouraging each other to double AMC’s stock and call options by sharing portfolio screenshots and marketing huge returns. One of the WSB Friday trend posts is “$ AMC YOLO UPDATE: 4948 shares, 10 calls across 4 brokers, but not yet for sale!”

Gamestop, This was the star of the show among retail enthusiasts in January, but this week it’s a relatively modest 40% rise.

Data from S3 Partners show that this week’s AMC surge has already cost short sales $ 1.3 billion.

Shortcovers may be fueling AMC’s large rally this week. Short-selling stocks were forced to buy back borrowed stocks when short-selling stocks rose significantly, closing short-selling positions. And reduce the loss. Forced buying tends to accelerate the rally even further.

According to S3 Partners, AMC is a fairly short-sold name, with about 20% of floating stocks being short-sold, while the average short-selling of typical US stocks is 5%.

Although the business has begun to recover as economic activity resumes, AMC is still facing severe headwinds such as theater capacity and competition from streaming services.

With approximately $ 5 billion in debt and $ 450 million in deferred lease repayments, the coronavirus pandemic has significantly reduced earnings.

Rich Greenfield, co-founder of LightShed Partners, said on CNBC’s “Squawk Box“They never generate cash in their current capital structure. They traded 7 times more than EBITDA before the pandemic. Now they trade 25 times more than EBITDA, due to today’s industry changes. The situation is getting worse. This just goes against all logic. “

— CNBC’s Sarah Whitten contributed to this article.

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Reddit favorites triple in a week and AMC shares rise again

Source link Reddit favorites triple in a week and AMC shares rise again

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